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Bill Summary · LC 1988

Summary of Legislative Bill LC 1988: Generally Revise State Fuel Tax Laws

Purpose and Intent

This draft bill, known as LC 1988, proposes to make several changes to the state's fuel tax laws. The main goals of the legislation are to:

  1. Increase the state's fuel tax rates in order to generate additional revenue for transportation infrastructure projects.
  2. Transition the state's fuel tax system from a flat per-gallon rate to a variable rate based on the wholesale price of fuel.
  3. Streamline and modernize the administration and collection of fuel taxes.

Key Provisions

The key changes proposed in LC 1988 include:

Fuel Tax Rate Increase

  • Raises the state's gasoline tax from the current $0.32 per gallon to $0.42 per gallon.
  • Increases the state's diesel fuel tax from $0.29 per gallon to $0.39 per gallon.
  • These new tax rates would take effect on January 1, 2025.

Variable Fuel Tax Rate

  • Transitions the fuel tax from a flat per-gallon rate to a variable rate based on the wholesale price of fuel.
  • The new variable rate would be calculated as 16% of the average wholesale price, with a minimum rate of $0.32 per gallon for gasoline and $0.29 per gallon for diesel.
  • This variable rate structure is intended to automatically adjust fuel tax revenue in response to changes in fuel prices.

Administrative Changes

  • Requires all fuel suppliers and distributors to electronically file tax returns and payments.
  • Grants the state Department of Revenue additional authority to audit fuel tax collections.
  • Increases penalties for late or inaccurate fuel tax filings.

Affected Parties and Impact

If enacted, LC 1988 would primarily impact:

  • Drivers and consumers of gasoline and diesel fuel, who would see higher fuel prices due to the tax increases.
  • Fuel suppliers, distributors, and retailers, who would face new electronic filing requirements and potential audits.
  • State and local governments, which would receive an estimated $75 million in additional annual revenue for transportation projects.

Procedural and Timeline Aspects

As a draft bill, LC 1988 has not yet been formally introduced in the state legislature. The bill is currently in the "draft" stage and will need to go through the full legislative process, including committee hearings and votes, before potentially becoming law. If enacted, the fuel tax changes would take effect on January 1, 2025.

Compiled from official sources — confirm details with the bill’s official record.

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